Since March this year, the price of gold has soared, igniting consumers' enthusiasm for buying gold. However, behind the "gold buying fever", investors have encountered many consumption "pits".
According to the analysis of complaints received by the National Consumers Association in the first quarter released by the China Consumers Association, compared with the first quarter of 2023, gold sales irregularities are frequent, and jewelry complaints have increased significantly.
Irregular sales of gold are frequent
As the sales price of gold continues to rise, consumers' enthusiasm for buying gold and gold jewelry has gradually increased, and the irregular business practices of some merchants have caused a large number of consumer complaints.
In its analysis, the China Consumers Association pointed out that the main complaints in the field of gold consumption in the first quarter were: First, the weight and material of gold sold by online shopping merchants did not match the publicity, and even forged brands and certification certificates to sell fake gold. Second, the gold sales stores are closed and run away, and consumers who buy "escrow" gold cannot be cashed out when they expire. Third, there are many disputes over "fixed price" gold jewelry. Merchants deliberately do not inform the specific gram weight and redemption restrictions of gold jewelry, and consumers buy "a fixed price", and calculate by gram when replacement.
The China Consumers Association reminds consumers that gold consumption is generally a large expenditure, and consumers should try to choose reputable brands or operators with perfect after-sales service when buying gold and gold jewelry, and do not buy gold jewelry that is significantly lower than the market price.
The China Consumers Association pointed out that gram weight is one of the most concerned points for consumers to buy gold jewelry, and operators should be marked with a prominent mark when selling "fixed price" gold jewelry to avoid confusion with other gold jewelry, and take the initiative to inform consumers of the specific gram weight and after-sales restrictions of "fixed price" gold, so as to reduce disputes caused by consumers due to uninformed purchases.
Short-term gold price volatility has increased
In addition to being wary of the "pitfalls" of buying gold jewelry, consumers should also be fully aware of the risks involved in investing in gold and need to be cautious when entering the market.
In recent times, the price of gold has become more volatile. After a sharp decline in late April, international gold prices have recently returned to their upward trend. On May 10, the spot gold price in London closed at $2,360.220 per ounce. Not long ago, the London spot gold price briefly fell below the $2,300 mark.
Jewellery prices are also more volatile. The Financial Times reporter visited a number of shopping malls in Beijing and found that before and after the "May Day holiday", many brands of gold jewelry launched holiday derogation discounts, which were about 600 yuan/gram after discount, and even some brands of gold jewelry gave a low price of 580 yuan/gram in the near future. On May 12, Mother's Day, the price of branded gold jewellery rose to about 680 yuan/gram after the discount.
There is a certain disagreement in the market about the trend of gold prices, but many institutions have warned that there are large fluctuations in short-term gold prices.
"The rapid and sharp rise in gold prices after March 2024 has been fueled to some extent by speculation in the financial market, and there is an overshoot part. There is a big divergence in the market on the future trend of gold prices. Fan Ruoying, a researcher at the Bank of China Research Institute, said that even in the rising cycle, gold prices still fluctuate greatly, and face a greater risk of correction in the short term. Considering the investment characteristics of people who are prone to "chasing up and down", investors need to strengthen their prediction of future risks, and financial institutions should also remind investors of the risk of market volatility in a timely manner.
Gao Ruidong, chief economist of Everbright Securities, said that short-term market sentiment and safe-haven demand will amplify the volatility of gold prices, but with the support of interest rate cut expectations, the impact of the decline in safe-haven demand on gold prices should also be relatively limited. This round of gold rally is mainly affected by supply and demand, and the large-scale gold purchases of global central banks have pushed up the gold price center, and under the new center level, the decline in US bond interest rates and real interest rates will still boost gold prices.
In addition, Fan Ruoying said that gold, as a special precious metal commodity, has three attributes: currency, finance and commodity, which together create gold's hedging, investment income and anti-inflation functions. From the perspective of historical law, the cycle duration of gold tends to be long, the first two rounds have experienced a rise of about 10 years, and the current round of gold price rise has gone through 4 years since 2020, and it is expected to be still unfinished. Under the combined effect of the three major factors of the continuous "de-dollarization" of global central banks, the rising global geopolitical uncertainty and the shift of the Federal Reserve's monetary policy, the upward momentum of gold prices in the future will remain strong.
Source: Financial Times client
Reporter: Xu Beibei
Editor: Duan Jiaxi
Email: [email protected]